Feb. 27 (Bloomberg) -- Sealink Funding Ltd.’s lawsuit
against JPMorgan Chase & Co. over $2.4 billion in residential
mortgage-backed securities was moved to federal court from New
York state court.

Sealink sued New York-based JPMorgan Chase and units
including Bear Stearns and EMC Mortgage LLC in September,
accusing them of making misrepresentations about the risks and
characteristics of the loans underlying securities bought
between 2005 and 2007.

The lawsuit was moved to U.S. District Court in Manhattan
by the defendants because it’s related to federal bankruptcy
proceedings and because it involves a party outside the U.S.,
according to documents filed in New York State Supreme Court on
Feb. 24.

The lawsuit was one of several filed in New York state
court during the past six months over residential mortgage-backed securities by Sealink, an Ireland-based fund created to
manage Landesbank Sachsen AG’s riskiest assets after the German
lender almost collapsed.

Sealink has also sued Bank of America Corp.’s Countrywide
unit over $1.6 billion in securities and Morgan Stanley over
$556 million of the investments. The Countrywide case was moved
to federal court in October. Sealink said last week that it
intends to sue banks including Royal Bank of Scotland Group Plc
and Credit Suisse AG over $948.8 million in mortgage securities.

Pools of Loans

Pools of home loans securitized into bonds were a central
part of the housing bubble that helped send the U.S. into the
biggest recession since the 1930s. The housing market collapsed,
and the crisis swept up lenders and investment banks as the
market for the securities evaporated.

SachsenLB, a state-owned lender, received a 17.3 billion-euro ($23.2 billion) bailout in 2007 to support an investment
vehicle that ran out of funding amid the credit crunch. Saxony
agreed a week later to sell the bank to Landesbank Baden-Wuerttemberg to avoid closure.

As part of the agreement, the state guaranteed to cover as
much as 2.75 billion euros in possible losses from investments
backed by assets including U.S. subprime mortgages that were
placed in Sealink.

The case is Sealink Funding Ltd. v. Bear Stearns & Co.
Inc., 652681/2011, New York State Supreme Court, New York
County, Manhattan.